Less than two months after the CDC declared COVID-19 a public health emergency on February 3, 2020, the stock market slump that followed abruptly ended and equities have rocketed upward ever since. The Wilshire 5000 Total Market Cap Index, the most comprehensive measure of the market value of publicly traded U.S. corporations, nearly doubled to record highs from the March 2020 lows, rising from $22.5 trillion to $43.3 trillion by late May 2021.
The economy proved no less resilient. On the heels of the shortest major recession on record, resurgent GDP (gross domestic product) rebounded to the December 2019 peak by the end of the first quarter of 2021, reaching $22.1 trillion. Economically and financially, the headlines telegraphed ‘All’s well.’Continue reading “The Broken Window Fallacy”